19 March 2020
INTEREST RATE INCREASE
Effective from 20 March 2020, Danmarks Nationalbank's interest rate on certificates of deposit is increased by 0.15 percentage point. The monetary policy spread to the euro area is thereby narrowed from -0.25 to -0.10 percentage points, remaining lower than the rate in the euro area. In the context of Denmark's fixed exchange rate policy, the interest rate increase follows Danmarks Nationalbank's sale of foreign exchange in the market.
The other policy rates remain unchanged, with the lending rate at 0.05 per cent, the current-account rate at 0.00 and the discount rate at 0.00 per cent.
Danmarks Nationalbank has decided to expand the extraordinary lending facility with 3-month variable interest rate loans against collateral. The expanded facility will temporarily increase the access of monetary policy counterparts to longer-term funding.
The expansion complements the bank and mortgage credit institutions access to market funding with a longer duration. The 3-months facility supports a well-functioning bond market.
The interest rate on the extraordinary lending facility will be -0.35 per cent. This implies that the interest rate on the 1-week loans, announced on March 12 will be increased by 0.15 percentage point. The interest rate on the 3-month facility is variable and follows the interest rate on the 1-week loans.
The new 3-month loans follow the other monetary policy instruments with maturity on the last banking day of the week. The new 3-month loan facility will be available for the first time March 27 2020 and weekly thereafter, while the 1-week loans as previously announced will be available for the first time March 20 2020. Monetary policy counterparts have access to the new lending facility via Kronos2.
Enquiries can be directed to press advicer Ole Mikkelsen on tel. +45 3363 6027.